Thierry Desmarest - TotalEnergies · 2020. 3. 25. · adjusted income defined as income at...
Transcript of Thierry Desmarest - TotalEnergies · 2020. 3. 25. · adjusted income defined as income at...
2009 Activities of the Board of Directors
Definition of strategic orientation and approval of major investments
Group Strategy and 5-year plan
Review business segments outlook
Closing accounts, internal control andrisk management
Governance Debate on Board procedures
Convocation and preparation of the Shareholders’ meeting
Executive compensation, granting of stock options and restricted shares
2009 examples
Finance Groupinsurance and financial policies
Abu DhabiCall for tenders for the construction and operation of a nuclear power plant
NigeriaInvestment:Egina, deep offshore
EthicsEthics Committee Activities
Authorizing guarantees regarding callfor tenders
Algeria
Investor Relations – www.total.com – 3C32501
Corporate Governance based on the directors’complementary skills and experience
Complementary skills adapted to an international, capital-intensive Group
From 21 directors in 2000 to 15 in 2010
Women : 5% of the Board in 2000 ; 13% in 2010
Non-French : between 20% and 30% since 2000
A director representing employee shareholders since 2004
Since 2000, more diverse skill set within the Board thanks to the increasing presence of economists and energy sector experts : 25% in 2010 versus 10% in 2000
A diversified and highly involved Board
Investor Relations – www.total.com – 3C32502
Important activity in 2009
meetings (6 in 2008)
Board attendance rate :
89% (89% in 2008)
Board committees attendance rate :
100% (90% in 2008)
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Return to the combination of the Chairman and Chief Executive Officer roles
Separation of the roles implemented in February 2007 for a transition period
Board strengthened by the recent appointmentsof many independent directors
Specific Board committees composed of independent directorsAudit Committee : 100% independentsNominating and Governance Committee : 75% independentsCompensation Committee : 100% independents
AFEP-MEDEF Code Compliance
Corporate governance structure adapted to our industry challenges
Investor Relations – www.total.com – 3C32503
Variable portion of compensation reviewed and assessed by the Compensation Committee depending on :
Return on equityEvolution of the Group’s earnings compared to other major oil companiesPersonal contribution to the Group’s success
Early departureSeverance benefits equal to two years’ compensation except in the case of gross negligence or willful misconduct
Challenging performance conditions applied to retirement and severance benefits
Compensation of the Chairman and Chief Executive Officer subject to performance conditions
* Thierry Desmarest was Chairman and Chief Executive Officer until February 13, 2007** Christophe de Margerie has been Chief Executive Officer since February 14, 2007
Challenging performance conditions
2007
Chairman of the Boardcompensation*
2008 2009
2008
Chief Executive Officer compensation**
20092007
3
2
1
2
1
M€
M€
Investor Relations – www.total.com – 3C32504
Variable portion Fixed portion
Variable portion Fixed portion
Allocation principlesNo allocation to the ChairmanWide distribution : more than 2,000 beneficiariesLimited dilution
The Compensation Committee manages the allocation of stock options for the different beneficiaries (Chief Executive Officer, executive officers, managers and employees)
Performance conditions apply to the Chief Executive Officer and, going forward, to all executive officers and managers
Stock options : part of the variable portion of the managers and employees compensation
Stock options granted to Thierry Desmarest
Stock options granted to Christophe de Margerie
2007
100,000
Limit dilution while aligning the interests of management and employees with
those of the shareholders
Final allocation Not granted because of performance conditions not entirely met
2008 2009
Investor Relations – www.total.com – 3C32505
2007 2008 2009
200,000
100,000
A plan combining restricted shares and stock options to reward individual performance
Allocation of stock options by type of beneficiary
Allocation of restricted shares by type of beneficiary
2007 2008 20092007 2008 2009
Number of beneficiaries10,0029,3538,614 2,726 2,014 2,052
Other employees
Others managers
Senior managers
No restricted shares granted to the Chairman and the Chief Executive Officer
Performance conditions for the allocation of restricted shares
Investor Relations – www.total.com – 3C32506
Shareholding structure by shareholder type
4%Group
employees
8%Individual
shareholders
88%Institutional shareholders
Encouraging individual and employee shareholding
540,000 individual shareholders
110,000 employees and former employee shareholders
50,000 new employee shareholders with 25 restricted shares granted to all employees in June 2010
Shareholding structure by geographic area
34%Europe(excl. France)
35%France
5%Middle East
and Asia
26%North
America
Investor Relations – www.total.com – 3C32507
Proposed dividend of € 2.28 per share, stable compared to 2008
Dividend increased by 4 times over the past 10 years
Dividend
1999 20092002 2005
€/share
2
1
Investor Relations – www.total.com – 3C32508
Average annual return over the past 10 years:+6.5% for Total vs -1.5% for CAC40 as of March 31st, 2010
Appreciation of a € 1,000 portfolio invested in Total shares vs CAC 40
Total CAC 40
Building shareholder value
Investor Relations – www.total.com – 3C32509
5 years 10 years 15 years
€ 6,763
€ 1,893€ 1,361
1,000
3,000
5,000
€
Initial investment
7,000
Investor Relations – www.total.com – 3C3250
Safety : our first priority at Total
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General Safety Inspection on 13 industrial sites in France following a series of accidents in 2009
Technical15%
Organization45%
Human factor40%
200,000 people including 96,000 Total staffNumber of incidents per man-hour worked reduced
by 80%* in ten years but still too many serious accidents
(Main lessons learned, in % of recommendations)
Modernizationof installations
Training/ Increasing awareness
Clarificationof rules
* based on a steady improvement in TRIR (Total Recordable Injury Rate) from 2001 to 2009
Environment 2009 – early 2010
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source : public data, through April 30, 2010* Henry Hub converted to $/boe based on 6 Mbtu = 1 boe ; ERMI, Total’s European Refining Margin Indicator
Excess capacity in oil market, partially absorbed by OPEC reductions
Collapse of refining margins
Spot gas price decoupled from crude price
Investor Relations – www.total.com – 3C3250
$/boe
2008 2009
$/t
140
100
60
20
140
100
60
20
European refining margin*
Brent
US spot gas*
2010
Progressively reducing spare capacity
Canada, Venezuela
Middle East
Mature areas
CIS
Africa, Brazil86
9591
+1.1 Mb/d
2009 2020(e)2015(e)
Change in global oil production capacity and demand by 2020(Mb/d)
Natural production decline of 6% per year on averageSatisfying anticipated growth in global oil demand
remains a challenge for the industry
Demand
8188 92
+0.8 Mb/d Demand growth(yearly average)
Production capacity
12 Investor Relations – www.total.com – 3C3250
adjusted income defined as income at replacement cost, excluding special items and Total’s equity share of adjustments related to Sanofi-Aventis
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20082009 %
Adjusted net income (B€) 7.8 13.9 -44% 2.3 2.1 +9%
1Q 20091Q 2010 %
Total’s Quarterly Results
60
80
3 Brent
€/bB€4
402
1
20092008 1Q 2010
20
Adjusted net income
Adjusted net income : 7.8 billion euros in 2009and 2.3 billion euros in first quarter 2010
Investor Relations – www.total.com – 3C3250
Key achievements since beginning 2010
2nd train Yemen LNG
Ethane cracker -Qatar
CCS project in Lacq - France
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Increased production by 4.5% and invested 3.7 billion euros during 1st quarter 2010
* notification of Central Works Council in progress
Successful start-ups
FIDs of 2 new major projects
New permits and exploration
Adaptationto market trends
Portfolio changes
Surmont Ph.2 -Canada
Laggan Tormore- UK
Oil discoveries -Angola
Kazakhstan
Shale gas -France
Indonesia
Conversion of Dunkirk refinery* - France
TotalErg - Italy
Barnett shale - US
Halfaya - Iraq
Ahnet - Algeria
Asset sales in North Sea and US
Sale of MapaSpontex
Investor Relations – www.total.com – 3C3250
Communication Financière – www.total.com – 3C3250Communication Financière – www.total.com – 3C2714
Upstream
Maintaining ambitious Capex program and managing costs
Developing new projects to sustain profitable growth
* for 2009, net investments ; for 2010 budget : 1 € = $1.40, net investments excluding acquisitions and asset sales** FAS 69 (Opex, DD&A and Expl), consolidated subsidiaries, estimates for other majors based on public data
Upstream Capex*
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Lowest technical costs**
$/boe
12
16
20
2005 2006 2007
Exxon
Chevron
BP
Shell
Total
20082004
24
2009
Onshore
Offshore
Deep offshore
LNG
OtherExplorationHeavy oil
2009 2010(e)
In B€
10
5
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Indonesia
Halfaya
Gasco
Barnett shaleAhnet
Termokarstovoye
Significant expansion of exploration acreage and resource base since beginning 2009
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Satisfactory exploration results : 750 Mboe in2009Valorising Total’s technical expertise through new partnerships
Cobalt
Guyana Cameroon
Egypt
Vietnam
Absheron
Norway
KhvalinskoyeTobermorie
OTG
Investor Relations – www.total.com – 3C3250
AppraisalExploration
Business Development
Producing(2009)
Akpo - NigeriaTahiti - US
JV Barnett Shale - US
Qatargas 2 Train 5Yemen LNG (2 trains)
Under study
CLOV – AngolaEgina – NigeriaBlock 32 - Angola
Joslyn - CanadaNorthern Lights - CanadaBemolonga- Madagascar
Ahnet - AlgeriaSulige - ChinaMontélimar -FranceNeuquen -Argentina
Ichthys - AustraliaShtokman - RussiaNigerian projects
Under development
Pazflor - AngolaUsan – NigeriaLaggan/Tormore -UK
Surmont Ph.2 - Canada Angola LNGExpansion JV
Barnett Shale - US
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Well positioned in growth areas for the long term
Represents approx. 50% of Total’s resource base
Unconventional gasHeavy oilDeep offshore LNG
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A global LNG player
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LNG sales by origin and destination*
Outlook for strong growth over the medium term for the LNG marketTotal continuing to study new projects
* for Total, Group share of LNG sales by affiliates and participations, including ASC 932 (ex-FAS 69) production equivalent for Bontang sales and excluding trading
QatarQatargas 2 T5 (16.7%)
YemenYemen LNG (39.6%)
Start-up 3Q 2009
Start-up 4Q 2009and 2Q 2010
Investor Relations – www.total.com – 3C3250
US and UK spot markets(diversions possible)
Contracts in Asia
Contracts in Continental Europe
North Sea
Asia
Middle East
Africa
+40%
Origin Destination
2010(e)13 Mt
20099 Mt
Communication Financière – www.total.com – 3C3250Communication Financière – www.total.com – 3C2714
Downstream – Chemicals
Refining: necessary adaptation to market trends
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(Total estimate in Mb/d)
Estimated excess refining capacity at end-2015(e) in the absence of closures
Excess capacity
Under capacity
Capacity reduction in OECD countries necessary to allow for sustainable recovery in refining margins
Investor Relations – www.total.com – 3C3250
overcapacity estimated by comparing 2009 refinery utilization rates with average 2003-2007 utilization rates
Europe CIS
China
Asiaexcl. China
Middle East
Africa
North America
0
2
South America
European Marketing : diversity and quality of Total’s product offerings
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Strength of the service-station networkMore than 10,000 stations in Western Europe and leader in France
Quality of store and service offerings
Customer service for individual and professional clientsProduct diversity (fuel oil, LPG, lubricants…)
Network density and proximity
3.5 million Total fuel payment cards in Europe
Provider of innovative and multi-energy solutionsImproving energy efficiency (Excellium, “eco-driving” program…)
Pairing energies (solar / fuel oil)
A market also subjected to stricter regulationsSuccess of Total's strategy based on a long-term relationship
with its clients and continuous efficiency optimization
Investor Relations – www.total.com – 3C3250
Continuing to strengthen Petrochemicals
Doha
Mesaieed
Ras Laffan
Ethylenepipeline
Qapco cracker(720 kt/y) and
polyethylene unitsTotal 20%
New Ras Laffan olefin cracker (1.3 Mt/y)
March 2010Total 22%
Qatofin polyethylene unit (2009)Total 49%
Qatar
North Field(gas)
Safety and sustainable developmentAction plans for improved safetyEnergy efficiency, bio-plastics
Competitive in mature areas2006 and 2009 consolidation plans in Gonfreville and Carling (France) including 630 M€ Capex
Developing in growth areasSouth KoreaQatar
Successful partnership in Qatar based on our integrated business model
New Qapcopolyethylene unit
2012(e)Total 20%
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Communication Financière – www.total.com – 3C3250Communication Financière – www.total.com – 3C2714
Outlook
A long-term partner with host nations and their people
Establish sustainable partnerships with host countries
Fair revenue sharing and promotion of transparencyPartnerships with national companies
Maximize local contentWork with local human resources and contractorsTransfer of skills and knowledge
Contribute to local developmentPrograms adapted to local needs (education, health, micro-finance,...)Focus on actions which will not create dependence on the Group
Increasing acceptability of our operations
AkpoMore than 40% of hours worked in Nigeria
Yemen LNG
Objective : 90% of employees to be Yemenis
EducationMore than 11,000 scholarships provided in 2009
MyanmarMicro-finance programs : 1,200 loans outstanding
Investor Relations – www.total.com – 3C325022
Significant investment program : 13 billion euros in 2010
Capex by segment*
* for 2009 : net investments ; for 2010 Budget : 1€ = $1.40, net investments excluding acquisitions and asset sales
Combining discipline and expertise to develop value creating projects
650 M€ spent in R&D in 2009
Main 2010(e) investments
80% of Capex dedicated to Upstream
Investor Relations – www.total.com – 3C3250
EkofiskNorway
KashaganKazakhstan
Pazflor + Block 17Angola
MahakamIndonesia
OML 58Nigeria
Port Arthur refineryUS
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Upstream
DownstreamChemicals
2009 2010Budget
13 B€ 13 B€
Capitalizing on our industrial assets, R&D and partnerships
Solar, wind, biofuels,other renewables
Biomass (excl. biofuels)
Global energy mix by 2030(e)*
75% fossil fuels30% oil22% gas
* Total estimates
Developing complementary, low-CO2 emitting energies in response to the challenge of satisfying future demand
Solar : integration and advanced R&D
Biomass : R&D for advanced biofuels and green chemicals
Nuclear : a long-term objective
Investor Relations – www.total.com – 3C325024
2005 2030(e)
Hydro
Nuclear
Coal
Oiland gas
Mboe/d350
250
150
50
Solid balance sheet offering visibility
Proposed 2009 dividend stable at 2.28 €/share
Investor Relations – www.total.com – 3C3250
TOTAL’s March 31, 2010financial position
4.4Net debt
Equity
7.3
Net debt and equityat Dec. 31, 2009
11.7
Sanofi-Aventis
54.5 54.5CAC 40*
TOTAL
13.6
51.07.4
14.7
(B€)
27%50%Gearing
(B€)
21.5%
* average for 34 companies, excluding banks, insurance and Total25
Recognized expertise in major project management
Ability to form partnerships and strengthen a large and diversified portfolio of projects
Social and environmental responsibilities integrated into our strategy
An integrated Group improving the competitiveness of its Downstream and Chemicals
Investor Relations – www.total.com – 3C325026
Communication Financière – www.total.com – 3C2714
Reports of the joint statutoryauditors
Financial Reporting
Financial Reporting – www.total.com – 3C3250
Reports of the joint statutory auditors
1. Report on the annual financial statements of Total S.A.
2. Report on the consolidated financial statements of Total S.A.
3. Statutory auditors’ special report on regulated agreements and commitments
4. Report on capital operations
5. Statutory auditors’ report on the report prepared by the Chairman of the Board of Directors of Total S.A.
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Financial Reporting – www.total.com – 3C3250
Annual financial statements of the parent company, Total S.A.
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Unqualified opinion on the financial statements, with no matters to report
“In our opinion, the financial statements give a true and fair view of the assets and liabilities and of the financial position of the Company as at 31 December 2009 and of the results of its operations for the year then ended in accordance with French accounting principles.”
(Registration document -English language version-: pages 284 and 285)
(Resolution 1)
Financial Reporting – www.total.com – 3C3250
Consolidated financial statements of Total
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Unqualified opinion on the financial statements
(Resolution 2)
Matter to report“Application of the new definitions of the hydrocarbon reserves and of the new
methods of estimating them, described in the note “Introduction” in the notes to the consolidated financial statements”
Issues reviewed in particular detail:The application of the “successful efforts” method for the oil and gas activities;Depreciation of long-lived assets;Provisions for dismantlement, removal and environmental costs;Valuation of retirement obligations;Calculation of current and deferred tax.
(Registration document -English language version- : pages 180 and 181)
Financial Reporting – www.total.com – 3C3250
Commitments concerning retirement conditions for corporate officers
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Persons affected: Mr Desmarest and Mr de Margerie
They will be entitled to the same benefits as the employees of Total S.A. as regards lump-sum retirement payment and the supplementary pension plan.
The lump-sum retirement payment is subject to performance conditions.The supplementary pension plan is applicable to the Chairman and the Chief Executive Officer and employees of the Group whose annual compensation is greater than the annual social security threshold multiplied by eight.
Based on the compensation received in 2009, these commitments correspond to an annual pension amounting to:
26.29% for Mr Desmarest ;18.72% for Mr de Margerie.
(Resolutions 4 and 5)
(Registration document -English language version- : pages 282 and 283)
Regulated agreements and commitments
Financial Reporting – www.total.com – 3C3250
Agreement in case of termination of the Chief Executive Officer’s employment or in case his term of office is not renewed
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Person affected: Mr de Margerie
If the Chief Executive Officer’s employment is terminated or if his term of office is not renewed, he is eligible for severance benefits equal to two times his annual pay.
The severance benefits that may be paid upon a change of control or a change of strategy are subject to performance conditions.
(Resolutions 4 and 5)
(Registration document -English language version- : pages 282 and 283)
Regulated agreements and commitments
Financial Reporting – www.total.com – 3C3250
Capital operations
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(Resolutions 17 to 21)
Nature of the operations concerned.Issue of ordinary shares and of various securities with or without cancellation of preferential subscription rights (resolutions 17, 18 and 19).Issue of shares reserved for members of the Group’s savings plan (resolution 20).Allocation of stock options or share purchase plans for employees and management of the Group (resolution 21).
No matters to report on the methods proposed and the informationgiven in the reports
(Resolutions 18 and 20)
We shall develop additional reports if necessary when your Board of Directors has made use of these authorizations.
Investor Relations – www.total.com – 3C3250
Disclaimer This document may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, business, strategy and plans of Total. Such statements are based on a number of assumptions that could ultimately prove inaccurate, and are subject to a number of risk factors, including currency fluctuations, the price of petroleum products, the ability to realize cost reductions and operating efficiencies without unduly disrupting business operations, environmental regulatory considerations and general economic and business conditions. Total does not assume any obligation to update publicly any forward-looking statement, whether as a result of new information, future events or otherwise. Further information on factors which could affect the company’s financial results is provided in documents filed by the Group with the French Autorité des MarchésFinanciers and the US Securities and Exchange Commission.
Business segment information is presented in accordance with the Group internal reporting system used by the Chief operating decision maker to measure performance and allocate resources internally. Due to their particular nature or significance, certain transactions qualified as “special items” are excluded from the business segment figures. In general, special items relate to transactions that are significant, infrequent or unusual. However, in certain instances, certain transactions such as restructuring costs or assets disposals, which are not considered to be representative of normal course of business, may be qualified as special items although they may have occurred within prior years or are likely to recur within following years.
The adjusted results of the Downstream and Chemical segments are also presented according to the replacement cost method. This method is used to assess the segments’ performance and ensure the comparability of the segments’ results with those of the Group’s main competitors, notably from North America.
In the replacement cost method, which approximates the LIFO (Last-In, First-Out) method, the variation of inventory values in the income statement is determined by the average price of the period rather than the historical value. The inventory valuation effect is the difference between the results according to FIFO (First-In, First-Out) and replacement cost.
In this framework, performance measures such as adjusted operating income, adjusted net operating income and adjusted net income are defined as incomes using replacement cost, adjusted for special items and excluding Total’s equity share of the adjustments related to Sanofi-Aventis. They are meant to facilitate the analysis of the financial performance and the comparison of income between periods.
Dollar amounts presented herein represent euro amounts converted at the average euro-dollar exchange rate for the applicable period and are not the result of financial statements prepared in dollars.
Cautionary Note to U.S. Investors - The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to separately disclose proved, probable and possible reserves that a company has determined in accordance with the SEC rules. We may use certain terms in this presentation, such as “reserve potential” and “resources”, that the SEC’s guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File N° 1-10888, available from us at 2, place Jean Millier - La Défense 6 – 92078 Paris – La DéfenseCedex, France or at our website : www.total.com. You can also obtain this form from the SEC by calling 1-800-SEC-0330 or on the SEC’s website : www.sec.gov.
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